Guarantor Mortgages.

Blueprint Financial Solutions is your trusted adviser if you’re considering a guarantor mortgage. Our team of advisers provides personalised mortgage advice to clients in Gloucestershire and across the UK.

A guarantor mortgage is a type of loan that allows a family member or close friend to offer financial support without giving money directly to you or owning a share of your property. This type of mortgage can be a good way to borrow more money and secure better terms. If you have a small deposit or a limited credit history or score, a guarantor mortgage might be the right choice for you.   

What is a Guarantor Mortgage?

A guarantor mortgage is a loan you can apply for if you don’t have enough income of your own to be accepted for a standard mortgage. The guarantor is usually a close family member, and they agree to cover the payments if you can’t. The guarantor uses their income, savings or property as a backup for the loan.  

If you’re a first-time buyer, have low income, or other circumstances that mean you might not be accepted for a mortgage on your own, a guarantor mortgage could be a helpful option for you. 

With a guarantor mortgage, you might be able to borrow more money or take advantage of a lower interest rate because lenders feel more confident lending larger amounts. If you’re not able to save a large deposit, a guarantor mortgage could let you borrow more with a smaller deposit.   

As with any mortgage, it’s important to understand the risks of a guarantor mortgage. If you can’t make the payments, your guarantor’s finances could be affected if they have to cover them. It’s also important to remember that your guarantor will be responsible for possibly covering your payments until your loan is fully repaid. 

How Does a Guarantor Mortgage Work?

A guarantor mortgage could be a suitable option to make homeownership possible for you. However, you must understand how this type of loan works as they are a big responsibility for both you and your guarantor, so it’s important that you and your guarantor fully understand what is involved. 

If you decide to apply for a guarantor mortgage, your guarantor won’t own the property, they’ll simply agree to cover your monthly mortgage payments if you can’t. It will be your responsibility to make the monthly mortgage payments, and you’ll own the property. You must also follow the agreed-upon terms of your loan. Your guarantor will only be used if you miss or are at risk of missing payments. Your guarantor will agree to use their savings, income or property to cover your payments if you cannot. Lenders will take money from your guarantor’s savings or might recover the debt using their property. This means your guarantor might face financial difficulties or may even lose their property.  

Before you apply for a guarantor mortgage, you must spend time planning carefully and get professional advice. You are at risk of losing your property if you miss payments, and your guarantor’s credit score and finances might be affected. If you’re unable to pay your loan back, your guarantor might have to sell their property to cover your debt. This is why it’s essential to budget carefully and thoroughly and make sure you can afford your monthly repayments.

Who Are Guarantor Mortgages Suitable For?

Guarantor mortgages could be suitable if you might struggle to get a standard mortgage. If you’re a first-time buyer, have a limited or poor credit history, or are a young professional, this mortgage type could be a suitable option for purchasing a property with.

Saving for a large deposit as a first-time buyer can be challenging. If your income is too low to be approved for a standard mortgage, a guarantor mortgage could help you onto the property ladder by letting you borrow more using a smaller deposit.

If you’re a young professional in the early stages of your career, a guarantor mortgage could work for you, even if your current income is too low to be accepted for a standard mortgage. By using a guarantor who gives lenders more financial security, you can potentially borrow more money with better mortgage terms.    

Having a limited or poor credit history makes it difficult to be approved for a standard mortgage. It might be easier to be approved for a guarantor mortgage as lenders view this type of loan as less risky because the guarantor agrees to back the loan in the event of missed payments.

What Are the Criteria for a Guarantor Mortgage?

If you’d like to apply for a guarantor mortgage, you must meet some basic criteria. Lenders will look at your income, credit score and deposit before making a decision.

To be approved for a guarantor mortgage, lenders will check if your income is enough to cover the monthly payments. Your credit score will be analysed to see how well you’ve managed debt, such as credit cards and loans, in the past. Most guarantor mortgages need a deposit, but they can be smaller than standard mortgages. Some lenders let you borrow the full loan amount with a guarantor.   

Your guarantor must meet specific criteria, and lenders will favour them if they have a stable income and good credit history, and they can cover the monthly payments if you can’t. It’s important for guarantors to remember that they may need to secure the loan against their savings or property.

Lenders feel confident that loans are safe because of the financial stability a guarantor offers. They know that any missed payments will be paid by the guarantor, but a guarantor’s credit score or personal finances may be at risk if they do have to pay. 

Who Can Be a Mortgage Guarantor?

Your guarantor will usually be a close family member, such as a parent, grandparent or sibling. They must have a stable income, a strong credit history, and have access to enough funds to cover your mortgage payments if you’re unable to. If they own a property or have a large amount of savings, lenders are more likely to approve them.

The main financial responsibility of your guarantor is to guarantee the mortgage payments. They are legally responsible for making the payments if you miss any. You and your guarantor must remember that their property and savings might be at risk if they back the loan. Your guarantor’s finances could be seriously affected, so they must make sure they fully understand their responsibilities and be confident they can meet any potential repayments if they are asked to do so.

If someone agrees to be your guarantor, they are making a legal commitment. Lenders will ask your guarantor to pay if you can’t repay your loan, so they must be prepared to cover your missed payments. They might find it harder to borrow money in the future, and their credit score is likely to be impacted.

How Much Can I Borrow With a Guarantor Mortgage?

Your financial situation, along with the financial backing of a guarantor, will determine how much you can borrow with a guarantor mortgage. Your income and the amount you can afford to repay each month are usually used by lenders to calculate your loan. Having a guarantor might mean you’re able to borrow more.

For example, if your income only allows you to borrow £150,000, using a guarantor could mean you’re allowed to borrow more. Because of the guarantor’s extra financial security, you may be able to borrow the full property value or up to £200,000. Putting 5-20% of your guarantor’s property value into a savings account might also increase the amount you can borrow. Lenders view your guarantor as reducing the risk of the loan not being repaid. 
  
The amount you can borrow with a guarantor mortgage depends on your guarantor’s financial position. Lenders are likely to let you borrow more if your guarantor has a steady income, a strong credit score, savings and assets such as a property. If your guarantor meets a lender’s criteria, it might be possible to be approved for a 100% mortgage with no deposit needed. 

How Can Blueprint Financial Solutions Help?

The professional team of guarantor mortgage advisers at Blueprint Financial Solutions understands that every borrower’s circumstances are individual. Our aim is to make your guarantor mortgage application as simple and stress-free as possible.   

We start by getting to know you with a detailed consultation with one of our experienced mortgage advisers. We take the time to understand your individual financial needs, goals and circumstances. We then give you personalised advice on whether a guarantor mortgage is the most suitable choice of loan for you and how you can apply for one.

Over the years, we’ve built strong relationships with a wide network of lenders, and we have access to whole of market. This means we can find the most competitive lender and guarantor mortgage deal for you. We focus on finding a guarantor mortgage that fits your long-term financial goals and gives you the flexibility you need for the future. 

Once we’ve found the most advantageous mortgage deal for you, we guide you through every step of the process. From your application to working with estate agents, solicitors and conveyancers, we simplify the jargon and keep you informed throughout your application so you always know what’s happening. 

Our support doesn’t end when your guarantor mortgage application is completed and accepted. We stay with you, providing ongoing support and helping you adjust your guarantor mortgage plan if your circumstances, financial situation or goals change, making sure your guarantor mortgage continues to work well for you.

Book a consultation today with our experienced advisers at Blueprint Financial Solutions for tailored guidance on securing a guarantor mortgage and achieving your homeownership goals.

We have access to whole of market and will help you choose the most suitable guarantor mortgage for you.

From application to acceptance, we’re with you every step of the way, making the mortgage process quick, simple and stress-free.  

Fill in our contact form or email info@blueprintfs.co.uk.
 
If you’d prefer to speak to us, call us on 0800 644 6402.

Talk to us today and take the first step towards securing a guarantor mortgage!